GOP Slams Proposed IRS Changes on Nonprofits

The IRS said on Thursday that it would revise new regulations proposed last year to limit the activities of nonprofit groups, after an uproar by Republicans and conservatives, who charged that they were an assault on free speech.

But the embattled agency said that it would only hold one public hearing on the revised regulations — and that would only come after those revisions have been published.

"They've taken a half-step," Washington attorney Cleta Mitchell told Newsmax in an interview. She represents the Tea Party Patriots, which sued the IRS over the proposal in federal court last month. "But before they rewrite regulations in secret, they need to have a hearing before they come up with new proposed regulations.

"Yes, they got all these comments, but I'm not real happy about the idea that they're going back to the drawing board in secret," Mitchell added. "We have absolutely no idea what they're doing, what they're changing. They need to have multiple views instead of the views of those who just want to crack down on people's free speech."

In a statement released late Thursday, the Internal Revenue Service said that it would "consider any necessary changes" to the regulations it proposed on the day after Thanksgiving last year.

The agency — under fire for targeting tea party, conservative and religious groups — said that it had received a record 150,000 written comments on the rule changes.

"Consistent with our standard rulemaking process, we intend to review those comments carefully, take into account public feedback, and consider any necessary changes," the IRS statement said. "It is likely that we will make some changes to the proposed regulation in light of the comments we have received," the statement added, referring to previous comments made by IRS Commissioner John Koskinen.

However, "given the diversity of views expressed and the volume of substantive input" regarding the proposed rules, the statement said that IRS officials "have concluded that it would be more efficient and useful to hold a public hearing after we publish the revised proposed regulation."

The regulations would have prevented groups seeking 501(c)(4) tax-exempt status from running television ads, organizing get-out-the-vote efforts or voter registration drives, and handing out literature on any political issue.

The tax status allows the groups to keep their donors private.

The proposed rules are at the heart of the scandal engulfing the agency, which targeted conservative groups from 2010 through the 2012 presidential election. Organizations with such words as "tea party" and "patriot" in their names were singled out for special screening in their applications for tax-exempt status.

The planned changes immediately came under fire by Republicans and conservatives — as well as many liberal groups — charging that they were an assault on American free speech.

Senate Minority Leader Mitch McConnell was among many top Republicans who blasted the proposal.

A McConnell spokesman told Newsmax Thursday that the Kentucky senator was reviewing the IRS statement. "It’s full of weasel words like 'intend to' and 'likely,' " the spokesman said in response to an email query.

In addition, House Majority Leader Eric Cantor of Virginia hailed the IRS' reversal, but cautioned in a statement: "While this is a victory for free speech, we must ensure it is a permanent victory and so the House will continue its aggressive oversight efforts.

"The IRS cannot be used as a political weapon by any administration, and I will continue to ensure that remains the case in the months and years to come."

Rep. Darrell Issa, R-Calif., who chairs the House Oversight and Government Reform Committee, said in a statement that First Amendment advocates "deserve the most credit for blocking the implementation of the administration’s wrong-headed and ill-advised proposal."

Both McConnell and Issa, along with Ohio Rep. Jim Jordan, have written Koskinen urging him to reject the proposed regulations.

Jay Sekulow, chief counsel for the American Center for Law and Justice, said that the move "reflects the reality that the initial proposed rules were so deeply flawed and unconstitutional that the IRS had no choice but to back off."

The Washington-based ACLJ represents 41 organizations that are suing the IRS in federal court for singling them out for the special screening.

"We still believe the agency is institutionally incapable of correcting itself and any attempt to put further restrictions on the free speech of non-profit groups will not succeed," Sekulow said in a statement. "We continue our legal challenge against the IRS and will vigorously oppose the on-going attempt by the IRS to justify its illegal behavior by implementing a rules change."

But Mitchell was most critical of the IRS reversal, telling Newsmax that the switch merely amounted to public "posturing" — since the agency said that only one public hearing would be held on any revised regulations.

"That's exactly what it is," she said. "They are determined to curtail the free-speech rights of citizens. I absolutely believe that that's what they're intent on doing.

"They got caught. They thought they could slip it by. We mobilized against it.

"Are they saying that they're not going to have a comment period again?" Mitchell asked.

"That was interesting. They don't indicate that they're going to open it up for comments again.

"They indicate that they're going to have one public hearing and no comment period. The fix is in."

Mitchell said that the IRS must respond to the lawsuit brought by the Tea Party Patriots on last year's proposed changes by Friday. The group, based in Woodstock, Ga., sued on April 15, after the agency did not respond to a query in December under the Freedom of Information Act.

"It's just a completely sinister effort to curtail the free-speech rights of the American people," Mitchell said. "They are insufferable."
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